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SARS 'devastating' for airlines
(CNN) -- The SARS virus is having a devastating impact on Asian Pacific air carriers that is "without precedent," a regional airline body says. But the Association of Asia Pacific Airlines (AAPA) said its members were in a position to eventually recover from the massive downturn in air travel demand. The impact on airlines from SARS was up to five times greater than that from the terrorism attacks of September 2001, the association's Director-General, Richard Stirland, told CNN on Wednesday. Stirland said the International Air Transport Association (IATA) expected the world's airlines to lose about $10 billion this year. However bankruptcies among AAPA's members -- 17 scheduled airlines based in the Asia Pacific -- were unlikely, as most Asian carriers were profitable before the onset of the disease, he said. "They can weather the storm," he said. Three of AAPA's members -- Singapore Airlines, Cathay Pacific and Qantas -- were regarded as among the world's most profitable before the global spread of the SARS virus in March. They and other AAPA members have since downgraded their profit outlooks. Virtually every airline in the region has also cut services and staff to cope with dwindling passenger numbers. Stirland said that even when the SARS virus was under control, recovery for the airline industry would take "longer than most people think". He said building customer confidence that it was safe to visit Asia again would be a key test. Job lossesSo far, at least 663 people around the world have died from SARS, with most of the deaths occurring in China (294), Hong Kong (253), Singapore (28) and more recently Taiwan (52). (Full story) Taiwan on Wednesday reported 35 new cases of SARS, bringing its confirmed total to 418. But SARS appears to be ebbing in the rest of Asia, with the World Health Organization taking the Philippines off its travel advisory list and Australia doing the same for Singapore. Stirland's comments come after a report last week by the International Labor Organization (ILO) predicting that the world's tourism sector will likely lose another 5 million jobs to the SARS virus this year. The ILO analysis said there could be sector job losses of 30 percent or more in China, Hong Kong, Singapore, Taiwan and Vietnam. In a special report on the SARS impact released Tuesday, the Sydney-based Center for Asia Pacific Aviation said the region's airlines would recover first, because of their ability to move capacity around "relatively freely". But it said recovery in the third and fourth quarters of 2003 would be sensitive to any new developments. And it also warned the travel market profile had probably changed for good, with travellers much more sensitized to external shocks. "If nothing else," the Center concluded, "the SARS phenomenon has highlighted the now vital importance of China to tourism and trade within the region."
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